Wealthier communities: an empirical study of transaction cost economics applied to community land trust strategies in marginal communities in Northern America

The objective of this study is to evaluate the extent to which Community Land Trusts (CLT) have been successful in providing solutions for underutilized resources and productivity stagnation in urban areas suffering from disinvestment, displacement and poverty. The research attempts to answer two main questions about the CLT strategy. First, under what circumstances do CLTs achieve higher efficiency in producing affordable housing for latent groups compared to organizations with similar purposes (e.g. real estate enterprises and public housing authority), and, second, what factors lead the CLT strategy to spread in New England, USA. The study uses information gathered through interviews with CLTs’ practitioners and it analyzes the data using an economic model known as Transaction Cost approach (Williamson, 1981). The research controls for production and governance costs of resources utilized by CLTs, for human skills inside the same organization and for the impacts from the collaboration with other organizations. The results of the research show that Community Land Trust organizations achieve greater levels of efficiency when compared to other organizations in urban areas where the components necessary to increase affordable housing units and to maintain the land stock are characterized by high transaction costs. Additionally, skills specialization and collaborative effort allow CLTs to operate efficiently. The case studies show consistent results across different places. The Community Land Trust seems to be a promising tool in realizing both urban regeneration and economic development because of its ability of capturing latent group needs, which are larger in poor and neglected urban areas, and due to its ability of translating needs into actions as shown by the present study. The first chapter discusses the distance between theory and practice in social studies concerned about poverty and underdevelopment issues, the second presents tools to increase wealth, the third presents a framework for interpreting case studies, the fourth discusses the results of three selected CLTs (Bread and Roses Housing-MA, Champlain Housing Trust-VT, Dudley Neighborhood Incorporated-MA), and the final chapter provides conclusions and recommendations for practitioners.